U/S HUGHES CONGRATULATES PRESIDENT ARROYO ON

C O N F I D E N T I A L SECTION 01 OF 02 MANILA 000299 SIPDIS SIPDIS E.O. 12958: DECL: 01/29/2017 TAGS: PREL PTER EAID ECON KPAO RP SUBJECT: U/S HUGHES CONGRATULATES PRESIDENT ARROYO ON COUNTERTERRORISM SUCCESSES Classified By: Ambassador Kristie A. Kenney, reasons 1.4 (b) and (d) ¶1. (C) Summary. U/S Hughes voiced U.S. praise for recent Philippine counterterrorism successes to President Arroyo, who vowed to continue these operations as well as defense modernization and reform. President Arroyo called on the U.S. to sign ASEAN's Treaty of Amity and Cooperation this year. President Arroyo commented that her government's tough decisions on taxes and other measures were paying off with fiscal improvements and jobs creation, and offered thanks to the U.S. for its assistance, including MCC, Peace Corps, and USAID. While on a winning streak, she showed every intention of robustly maintaining the Philippines' ongoing progress and leadership, fully recognizing the importance of the U.S. partnership. End Summary. Getting the bad guys -------------- ¶2. (C) In a dinner in her honor at Malacanang Palace on January 24, U/S Karen Hughes expressed to President Gloria Macapagal Arroyo the appreciation of President Bush and the American people for recent success in the Philippines' ongoing counterterrorism operations, including the killings of wanted terrorist leaders Khadaffy Janjalani and Abu Solaiman of the Abu Sayyaf Group. Both at the dinner and during subsequent remarks to hundreds of Philippine troops in Malacanang's Heroes' Hall, President Arroyo thanked President Bush and the American people for the "extraordinary assistance" they continue to provide to the Philippines in these efforts. She vowed to continue counterterrorism operations, and offered special praise for the U.S. troops providing advice and assistance on Jolo Island, where other High Value Targets remain. In a moving ceremony with the troops, she presented awards and promotions to individual soldiers engaged in the assault that led to Khadaffy Janjalani's death in September 2006, and offered casualty payments to the widows of men killed in the offensive. A new video produced for the Philippine troops by their government highlighted these recent successes, prominently featuring words of congratulations and praise from Ambassador Kenney. ¶3. (C) President Arroyo noted the value of the Rewards For Justice program in obtaining information that led to successful attacks on wanted terrorists. Ambassador Kenney assured her that the Embassy was moving quickly to identify the appropriate civilian recipients and would ensure that the State Department quickly approved these recommendations in order to ensure timely payouts. Executive Secretary Ermita (a former Defense Secretary and retired General) and current Chief of Staff of the Armed Forces of the Philippines General Esperon noted that Philippine troops did not expect or want rewards other than the recognition of their President, as they received at the ceremony that evening. The President, who is concurrently Defense Secretary, described her ambitious procurement efforts to ensure that the armed forces had the equipment needed to fight and win these battles against terrorism. She pledged also to continue progress under the Philippine Defense Reform initiative launched by Presidents Bush and Arroyo during the exchange of state visits in 2003. Summitry -------------- ¶4. (C) U/S Hughes offered President Arroyo her congratulations on the substantive and logistical successes of the recent ASEAN-related summits in Cebu. President Arroyo emphasized that she had used her chairmanship to issue statements after the various summits that directly addressed the problems of Burma and North Korea and the need for the region to remain united in dealing with these situations. She called for the U.S. to accede to ASEAN's Treaty of Amity and Cooperation, noting that she had raised this at the APEC Leaders' Summit with President Bush. She suggested that the senior U.S. representative to the ASEAN Post-Ministerial Conference and ASEAN Regional Forum this summer in the Philippines sign the treaty. Tough decisions -------------- ¶5. (C) President Arroyo outlined some of the difficult but worthwhile decisions she had made to provide a stronger MANILA 00000299 002 OF 002 economic base for the Philippine future, notably raising the value added tax in 2005. She said that the government as a result now had additional revenues to invest in infrastructure, education, health, and other key sectors. She underscored her government's interest in becoming a Millennium Challenge Corporation compact country, while describing progress on the ongoing MCC Threshold Country program. Finance Secretary Teves noted that MCC had initially relied on inaccurate statistics regarding the Philippine record on investing in people and that the Philippine government had now provided more accurate information. USAID-P Director Lindborg highlighted the unique and "unprecedented" $20 million matching contribution the Philippine government had made to support the threshold program. ¶6. (C) President Arroyo complimented the important role the U.S. continued to play in assisting Philippine development, including work of the 100 Peace Corp volunteers and the many programs of USAID. She said that she had already mandated a return to English as the language of instruction in Philippine schools, another area in which the U.S. was able to play a helpful role. ¶7. (C) Job creation had been another major success of her Administration, President Arroyo explained, while admitting some criticism that most of the business process outsourcing (i.e. call centers) sector jobs were high end only. Finance Secretary Teves countered this misimpression, explaining that SIPDIS even these sectors employed a large number of support personnel, so the ripple effect was greater than many Filipinos realized. President Arroyo described some difficulties in getting out her messages due to opposition from some elements in the media, and said that the Philippine media had learned both good and bad lessons from the extensive ties with the U.S. over the past 100 years. She noted that she, like U/S Hughes, had granted an interview to al-Jazeera. U/S Hughes said that she planned to give the first-ever U.S. interview to the Philippine radio channel targeting Overseas Filipino Workers. President Arroyo noted that now about 3.5 million Filipinos lived in the U.S., making this the largest concentration of Overseas Filipinos Workers anywhere in the world. Comment -------------- ¶8. (C) President Arroyo was noticeably elated at the recent counterterrorism successes and the Cebu Summits, and was in a warm, outgoing mood, aided in part by the playful presence of one of her young granddaughters. She effusively welcomed U/S Hughes and was unstinting in her appreciation for President Bush's support and the assistance from the U.S. Government in a variety of important programs. Her rapport with her own senior advisors demonstrated clear reliance on and high comfort level with Executive Secretary Ermita and General Esperon in particular. While on a winning streak, she showed every intention of robustly maintaining the Philippines' ongoing progress and leadership on counterterrorism, regional stability, economic reform, job creation, anti-corruption, and other key themes. ¶9. (U) U/S Hughes did not have an opportunity to review this message before departing post. Visit Embassy Manila's Classified website: http://www.state.sgov.gov/p/eap/manila/index. cfm KENNEY